Disney faces a showdown over its future this week as the Hollywood giant’s investors decide whether to back its leadership – or throw their weight behind a billionaire activist investor demanding change. The Magic Kingdom is under pressure, amid lackluster box office returns, an expensive bet on streaming and looming questions over the future of its legacy TV business. Against this backdrop Bob Iger, Disney’s boss, is fighting to persuade shareholders that he has the right team in place to revitalize the entertainment group. At its annual meeting on Wednesday, they will vote on calls for a boardroom shake-up. Nelson Peltz, the investment tycoon, has spent months campaigning for two seats on Disney’s board, arguing it has failed to act as the company’s earnings, reputation and stock price struggled. Allies of Peltz, 81, have questioned how Iger, 73, plans to turn the company around and lay the ground for its next leader. Iger, who served as CEO from 2005 to 2020, has already picked one successor – settling on Bob Chapek, who oversaw its parks and resorts – only to be summoned out of retirement two years later, when Chapek was ousted amid alarm on Wall Street over the company’s performance. As the proxy fight escalated, Iger has been backed by an array of powerful figures, including George Lucas, the Star Wars creator, and Laurene Powell Jobs, the philanthropist and widow of Steve Jobs – both significant shareholders – as well as Michael Eisner, ex-Disney CEO, Jamie Dimon, JPMorgan Chase boss and members of the Disney family. Over the years Peltz – who runs the hedge fund Trian Partners – has proven to be a formidable opponent, with campaigns at consumer goods companies including Mondelez, Heinz and Procter & Gamble. He has proposed taking one seat of Disney’s board for himself, and obtaining another for Jay Rasulo, the company’s former chief financial officer. In an interview last week, Peltz tried to win over management and shareholders. “We’re there to help these companies  … not to break them up for immediate gain and leave them lying by the road,” he told the Financial Times, insisting he is “not trying to fire” Iger. “I want to help him.” But Iger doesn’t want his help. Disney has told investors that it would be disruptive if Peltz joined the board and that he would likely slow down decision making. Disney said in a letter to shareholders that it is conducting a “diligent and thorough succession planning process”. “The proxy battle has become an intensely personal issue for Iger, as well as his proxy supporters, specifically to stop Peltz at all costs from claiming a board seat,” said Gareth Sutcliffe of Enders Analysis. Iger has personally visited major shareholders in recent weeks to urge their support, according to the Wall Street Journal, while Peltz and his partners – including his son, Matthew – have directly pitched investors, including on trips to Canada and the UK. At the heart of this fight is a debate over how successfully Disney is confronting its challenges, including the high cost of its Disney+ streaming service, the search for its next CEO and the need to identify new areas of growth in a rapidly-shifting entertainment business. “Disney in many respects is in a much better position than it was when Iger became CEO again,” said Sutcliffe, “but there are longterm risks, including what happens on linear TV networks and [streaming] costs. So there are still things that need to be done to put Disney on the right track.” And then there’s the company’s recent theatrical performance. Disney has been in the throes of what what Variety last year called a “bleak” period, when the animated music fable Wish joined a list of commercial disappointments, including The Marvels, Indiana Jones and the Dial of Destiny, The Haunted Mansion and Ant-Man and the Wasp: Quantumania. Disney’s studios “lost some focus”, Iger has acknowledged, after prioritizing quantity over quality. As the company works to turn around its fortunes at the box office, November’s release of Moana 2 – a sequel to the 2016 hit – will be scrutinized later this year. Disney in many respects is in a much better position than it was when Iger became CEO again, but there are longterm risks ... Gareth Sutcliffe Iger, a consummate dealmaker who works closely with the people who make Disney’s movies and series, has already announced eye-catching partnerships with Taylor Swift, to roll out her Era’s Tour concert film on Disney+, and Epic Games, the creator of Fortnite. While Peltz has claimed he is focused squarely on turning Disney’s business around, he also raised issue with the casting of its movies. “Why do I have to have a Marvel that’s all women?” he asked during his FT interview. “Not that I have anything against women, but why do I have to do that? “Why can’t I have Marvels that are both? Why do I need an all-Black cast?” The comments echoed those of former Marvel chief Ike Perlmutter, a vocal critic of Iger and key supporter of Peltz’s campaign. Perlmutter, who was fired by Disney last spring, endorsed criticisms of the company by Florida governor Ron DeSantis, with whom it was locked in a high-profile political spat. As this week’s vote crept closer, the proxy advisory firm Institutional Shareholders Services earlier this month recommended shareholders vote for Peltz, but not Rasulo. It cited a lack of “tangible progress towards succession, to give investors sufficient confidence that the company will not run aground after Iger departs, and in doing so, avoid future mutinies”. But another closely-followed advisory firm, Glass Lewis, recommended that investors endorse Disney’s own slate of 12 board directors instead. It pointed to the company’s clear strategy and “measurable shifts” in the business since Iger returned. Lucas, who sold the Star Wars franchise to Disney in 2012, remains one of the company’s largest individual investors. “Creating magic is not for amateurs,” he said in a statement last month which lauded Iger. “No one knows Disney better.” Tension appears to be mounting within the House of Mouse. “It’s astonishing how much resource Disney is putting into this fight,” said Sutcliffe, who said there is “clearly concern that Peltz and or Rasulo could get a seat”. This article was amended on 1 April 2024 because an earlier version erroneously referred to Moana as a Pixar production.